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News

SRVUSD Update: Budget and Negotiations

Posted 2/7/19

There is quite a bit of education-related information in the news lately. With recent headlines regarding the Governor’s January budget proposal, employee action in other school districts, and with our own negotiations for 2018-2019 not yet completed for all groups, including the San Ramon Valley Education Association (SRVEA) declaring an impasse in negotiations, we want to provide you with information about how these current events are impacting our district.

SRVUSD Budget Challenges

The San Ramon Valley Unified School District faces a number of budget challenges. These include:

District “turn the page” expenses for health benefits, step-and-column salary increases, and pension contributions increase each year. Collectively, these cost increases approach 4% of total Local Control Funding Formula (LCFF) revenue per year; however, the State’s Cost of Living Adjustment (COLA) applied to LCFF revenue is less than 4%. This discrepancy causes a structural imbalance in our district budget -- and almost all school district budgets -- throughout the state.

The District’s student enrollment dropped significantly this year, by almost 400 students. For every student enrolled, SRVUSD receives over $8,000. There are several neighboring districts throughout the Bay Area that receive in excess of $10,000 per student under LCFF, some even receive $20,000+ per student. The 2018-2019 enrollment decline equates to a loss of about $3.2 million in ongoing state funding. Moving forward, our enrollment is projected to decline by more than 400 additional students per year (compounding each year) for at least the next five years.

The State of California funds SRVUSD at a rate that places us as the 4th lowest funded unified school district per student in California under LCFF.

The District has worked to address these budget challenges through expenditure reductions, including decreases in structural expenses by reducing administrative, certificated and classified staffing through attrition at both the school and district levels. In addition, we have focused on increasing revenue through our Saturday Explore attendance recovery program, an Attendance Awareness Campaign, and the recruitment of interdistrict transfers.

Governor’s January 2019-2020 Proposed Budget

While the Governor’s January budget contains news of additional funding for public education, not all of his proposals will provide relief to our bottom line. The Governor’s budget for 2019-2020:

Increases the Cost of Living Adjustment from 2.57% to 3.46%, which adds $2.3 million to SRVUSD’s $350+ million budget.

Provides a one-time contribution to school districts’ pension obligations, which is projected to reduce SRVUSD’s $43+ million (and still growing) annual pension contribution by about $1.25 million.

Proposes other small investments in education, including Special Education, Early Childhood Education, and Facilities that will not result in a meaningful financial impact to our bottom line.

While some of this is good news, it does not relieve the District’s structural problem because the proposed 2019-2020 State COLA of 3.46% does not cover the District’s annual increases in health benefits, step-and-column salary, and pension expenses. This means that in order to maintain a balanced budget, deficit spending and dipping into reserves will be certain without local cuts.

Negotiations Update

The District is committed to continuing to invest as much as possible in our workforce while remaining fiscally prudent. Because the Governor’s proposal does provide some new money to districts in 2019-2020, the SRVUSD enhanced its 2018-2019 offer to all employees to include a 3% ongoing salary increase. Since each percentage point increase in salary equates to an additional $2.2 million in expenditures, this 3% offer totals $6.6 million in ongoing salary commitments retroactive to July 1, 2018. When combined with “turn the page” costs of compensation discussed above, total compensation increases, both individually and collectively, across our over 3,000 employees, will exceed 6% of the District’s on-going LCFF revenues. To provide perspective, a 3% increase is one of the highest salary offers made by a school district in Contra Costa County or Alameda County for the current school year. Additionally, the increase, if accepted by our employee groups, will maintain SRVUSD’s position as one of the top-paying school districts in the region, based on total employee compensation, which includes salary and district-paid, full-family health benefits.

While we have presented this offer, we have not yet come to an agreement with the San Ramon Valley Education Association (SRVEA), which represents our teachers and certificated staff, as well as the Service Employees International Union (SEIU). On Friday, February 1, 2019, SRVEA declared that they believe we have reached an impasse in this year’s negotiations process. The District is disheartened by this declaration. As we have done successfully for so long, we want to and believe we should be able to reach a mutually acceptable and sustainable resolution through ongoing bargaining sessions through the collective bargaining process, without outside assistance from a state mediator.

If you have been watching education headlines in the news, you are probably aware that SRVUSD is not alone this year in reaching impasse with its teachers’ union. Most prominently, last week, the Los Angeles Unified School District (LAUSD) strike ended with a tentative agreement. While the strike ended, the Los Angeles County Office of Education, which has to certify the financial feasibility of the settlement agreement, sent a letter to LAUSD’s Board of Education calling the agreement “not sustainable” due to its use of “one-time funding sources, such as reserves, for ongoing salary expenditures.” The County Office has given the LAUSD forty five days to identify ongoing budget cuts or additional revenues, or risk the settlement being rejected based on California fiscal solvency statutes.

We believe we can and should do better in the San Ramon Valley Unified School District. The SRVUSD values the tremendous contributions of all its employees and is committed to investing in its workforce to the extent that it can responsibly afford to do so. In order to protect all that we have worked together to build in this District, we remain fully committed to maintaining fiscal solvency. We are confident that our 3% proposal continues to invest in our employees while responsibly preserving our financial stability. Having taken the Governor’s proposal into account, the District looks forward to settling 2018-2019 negotiations with all employee groups in the near future and to strengthening the foundation of excellence which characterizes public education in the San Ramon Valley.

While we are legally limited on what we can share with you regarding negotiations, please know that we are committed to keeping you updated and to answering your questions. If you have questions or feedback, please email communications@srvusd.net and we will get back to you with a response.